The Home Stretch! Just when we think our plate is full, someone comes along and throws another bone on it! The lastest happening in Tallahassee has had the pari-mutual guns smoking for the last week. We have reprinted the article below from the Ocala Starbanner as it gives the most indepth accounting to date.
Do we feel this will happen this Legislative Session? No, we do not think it will. However, when the Legislature is in session, no one can be to sure of anything - stranger things have happened in the late closing hours. But one thing is certain, the FGA's Tallahassee team is ever vigilance and protcting the interests of the FGA.
According to Jack Cory, FGA/NGA's Chief Lobbyist, this legislation "...is probably not going anywhere this Session." Cory stated in one article "Most tracks would rather fight than make money, and this bill will probably be no different."
One thing is certain...the cards are now on the table and the fight is just building up steam. We are sure to be dealing with this when next Spring rolls around in Tallahassee.
Florida Greyhound Association
Ocala's race
Will legislation open the field for a track...?
By Ryan Conley
Email: ryan.conley@starbanner.com
Ocala Starbanner (Apr 18, 2004)
OCALA - For those following the saga surrounding a proposed Marion County racetrack, recently introduced Senate legislation is clearly viewed as a momentous step toward the creation of a horse race track in Ocala.
It was so momentous and so swift that many inside the industry and outside have scarcely had time to get adjusted to the idea, let alone understand the complex proposal.
But even if the amended bill should somehow pass before the current legislative session ends in two weeks - and the early odds say it is a longshot - a daunting myriad of challenges must be overcome to make way for the Ocala jewel envisioned by racing giant Magna Entertainment Corp.
Among those is the intense competition between two horse racing giants, Magna and Churchill Downs, not to mention competition from Tampa Bay Downs; horse industry infighting; litigation; and development hurdles.
"In most cases, it doesn't make sense to build new racetracks," said Ryan Worst, a senior analyst with New York investment company C.L. King & Associates. "There are certain things that make it extremely difficult to pull off - legislative issues that are outstanding, or other circumstances that wouldn't make a track profitable. To open a new racetrack without favorable legislation is highly risky in my view.
FTBOA executive vice president Richard Hancock, who was instrumental in placing the amendment into the hands of Sen. Nancy Argenziano, R-Dunnellon, says the amendment is a work in process. Much of the wording is what Magna has been voicing on its own the last few years.
But the bill has strong opposition, including some of the state's other racetracks, greyhound tracks and jai alai frontons.
"I'd say, if we have a 20 percent chance (of the bill becoming law). That would be optimistic," said Hancock, a former Oklahoma state legislator. "What we all understand is that this has a ways to go, and some changes will have to be made to it. Now we can sit down and work on some of the concerns others have."
Here, then, is a glance at some of the challenges facing Magna's horse track proposal
MAGNA ENTERTAINMENT VS. CHURCHILL DOWNS - These two giants of the racing world have been jockeying for the same market share since the late 1990s, spending hundreds of millions of dollars for 20 tracks between them. Magna owns Gulfstream Park in Hallandale Beach, Churchill owns Calder Racecourse in Miami. The two tracks are just a short drive from each other, but the two parent companies are miles apart in philosophy.
Despite the differences, they have rarely locked horns on any single issue. If somehow passed, the current Senate amendment, which includes strong reform to laws governing the pari-mutuel industry, could make Ocala ground-zero for a nasty battle between the two industry titans.
"There is no question that there is an intense rivalry between the companies, and not a lot of warmth between the two CEOs," said Tim Rice of the Louisiana stock brokerage firm Rice-Voelker. "Sometimes they are on the same page on certain things, but they are definitely rivals."
Frank Stronach, who counts the 4,800-acre Adena Springs South Farm near Ocala among his expansive industry holdings, heads Magna Entertainment, which by most accounts, has shook up the traditions of horse racing by coupling aggressive marketing ideas with cries for de-regulation and free enterprise. Churchill Downs, whose CEO is Tom Meeker, has also made headlines in building its network, but in a less flamboyant manner, holding more to its perceived values of a once-powerful sports industry.
Calder/Churchill says it will lose money in the bill's proposed changes on simulcasting, which is live televised transmissions of a track's racing to another facility for betting purposes. Calder also says that an Ocala track would dilute an already shrinking population of horses available to run in the Sunshine State.
"We will kill the bill," said Wilbur Brewton, legal counsel for Calder. "It is bad public policy."
Gulfstream/Magna says visionary thinking is needed to turn the tide of a downward spiraling Florida pari-mutuel industry. Gulfstream president Doug Donn says that $850 million was wagered in 1990 in South Florida venues, but last year, even with an 11 percent increase in the amount of live performances, the total was only $597 million.
"That's a disaster," Donn said. "We can't continue to do the things we have done in the past."
TAMPA BAY DOWNS - There is a third racetrack operating in Florida, the independently owned Tampa Bay Downs in Oldsmar. The amount of Ocala-based horses that ship to race at Tampa on a given day is significant, with estimates running as high as 40 percent. So any idea of placing a track in Ocala will likely always find opposition from that camp.
"The thought of putting a track just up the road from us, it could be a problem," said Ken Plante, a former state senator serving as Tallahassee lobbyist for Tampa Bay Downs. "If they have a good meet, and have good purses, the horses might stay there. We certainly think there is a potential for problem."
Hancock said that scenario could be a problem, but doesn't see it ever happening.
"A racetrack in Ocala probably doesn't help that situation, but the obvious solution is not to compete on the same days," he said. "We don't want to see that happening, but we have got to get people to the table to work these things out."
INDUSTRY DISSENSION - As evidenced by the above discussion, it is apparent that finding a common ground for all of the state's pari-mutuel entities to stand upon is a mighty task indeed. And it certainly confounds legislators at times. Dissension certainly doesn't facilitate the easy passage of any legislation, and certainly won't help the current bill.
"There is a long history of them not getting along," said Rep. Dennis Baxley, Ocala-R. "They are so hard on each other, and understanding the pieces of the pari-mutuel puzzle is so complex, that when they don't agree on anything, it is hard for us to know what is appropriate."
Not only are the different pari-mutuel entities fiercely trying to protect their own places in the gambling marketplace, each must contend with the advance of federally-protected Indian casinos, which are readying to open spectacular new venues in South Florida and Tampa, as well as wholly unregulated casino cruise ships. Those two competitors don't carry the heavy tax burden or responsibility to state laws.
Simply put, the same bitter enemies you are fighting must at times also be your strongest allies. Unity is uncommon.
"If I was a legislator and looking in from the outside, I would be scratching my head and say, 'You guys can't agree on anything, how do you expect us to know what to do?' " said Nadia Sanan, general manager of Padua Stables and an FTBOA board member. "We are at a crisis stage, and everyone has to put their differences aside."
OBS: THE WILD CARD - Ocala Breeders' Sales Co. owns the quarter horse permit that is the bill's key for an Ocala racetrack. With it, OBS operates its inter-track wagering complex on its Southwest 60th Avenue campus. Without it, OBS loses a key revenue maker.
Magna has made overtures to OBS about obtaining one of its permits - OBS also owns Ocala Jai Alai - including a recent pitch from Magna Entertainment president Jim McAlpine to the OBS board of directors. Both sides refuse to discuss the matter with the Star-Banner.
The current legislation would allow for OBS to convert its quarter horse permit to a thoroughbred permit - and then sell it. Obviously, this part of the amendment wouldn't have been necessary had the two parties been able to reach an agreement previously.
"We could only provide the language to allow this conversion to happen," said Hancock. "We can't force (OBS) to sell. But it's a no-brainer."
Chairman Norman Casse has said OBS wants to do what ever is good for the industry, but simple business principles says the company also wants to be compensated well. The common belief is that if video lottery terminals (VLTs) are added to state wagering facilities, the owners stand to make much more money.
OBS: PART II - OBS is also involved in a complex breach of contract lawsuit against its jai alai operation. The plaintiff, Second Chance Jai Alai LLC, is asking for $50 million in damages, based on future revenue projections from VLTs. The lawsuit was likely a strong contributing factor in changing the jai alai permit originally suggested in the FTBOA legislative agenda on April 2, to the quarter horse permit that was introduced in the current amendment on April 13. Magna would obviously want a permit clear of any encumbrances.
"I think that is exactly why they changed it," said attorney Madison McClellan, who is part of the flamboyant Willie Gary's legal team representing Second Chance.
IF THE BILL IS PASSED - Even if the amended bill passes, it would likely be challenged in court. The wording of the amendment is written specifically with OBS and Magna in mind, similar to the 1990 law that first allowed OBS to open its simulcast facility. That law, which gave OBS the right to simulcast without bearing the cost of a live meet, was eventually ruled unconstitutional by the Florida Supreme Court in 2001. But by that time, the law had been repealed, and replaced with a modified version.
"It's still unconstitutional, just no one wants to (spend the time and money to) sue them," said Calder's Brewton. "If this bill somehow passes, I will nail it to the wall in court."
This past week, legislation specifically written to fast-track expansion for The Villages Regional Hospital was overturned in a circuit court after being challenged by Ocala's two hospitals.
Additionally, current law says a new racetrack can't be built within 100 miles of another pari-mutuel facility. Dave Roberts, director of Florida's Division of Pari-Mutuel Wagering, says there are only two geographic locations in the state where a track could be built right now - in the Everglades, and somewhere near Cedar Key.
The state hasn't formally studied what plants fall within the 100-mile range of the projected Ocala track, but the Daytona Beach Kennel Club is certainly within those boundaries. The greyhound track's general manager, Mike Springer, declined comment.
"If you look at recent applications of the law, I think it (the Ocala track) could be prevented," said Roberts. "But it looks like they are attempting (via the current amendment) to create a special area where it could be built."
DEVELOPMENT ISSUES - Aside from the legislative drama, Magna must deal with local and state government bodies before it can think about building a racing complex in Ocala, a process that could take several months or years.
Magna owns more than 450 acres near the Interstate 75 and U.S. 27 intersection. Part of the land is in the county, part is in the city of Ocala, so some sort of annexation would be needed. Additionally, most of the land is zoned for agricultural use, and would require zoning and land-use changes.
Because it is a pari-mutuel facility, the project automatically becomes a Development of Regional Impact. The DRI review process, which takes about a year to complete, involves various government agencies, which will examine traffic and environmental impacts, among other issues.
Also, there is a key piece of property Magna needs to acquire to widen Northwest 34th Avenue. The corner lot at U.S. 27 would open the way for the proposed main entrance for the track.
Magna will likely move forward on the track only if it obtains the permit. Ocala city planner Tye Chighizola said last week that no formal or informal plans have been submitted.
THE PLAYERS Some of the principals involved in complex issues surrounding a proposed race track for Marion County:
MAGNA ENTERTAINMENT
The Toronto-based racing industry subsidiary of auto parts giant Magna International wants to build a track in Marion County. Magna is headed by prominent horseman and industrialist Frank Stronach, who counts Adena Springs South Farm near Ocala among his vast farm holdings in North America. Magna currently owns or operates 13 tracks worldwide, including Gulfstream Park in Hallandale Beach.
CHURCHILL DOWNS, INC.
The owners of the historic track where the Kentucky Derby is run annually, this company owns, operates or has an interest in six other tracks, including Calder Racecourse in Miami. Churchill Downs is the primary rival to Magna in the racing industry, and is opposed to the amended bill, saying that an Ocala track would dilute an already shrinking population of horses available to run in the Sunshine State.
TAMPA BAY DOWNS
Florida's oldest operating racetrack, based just west of Tampa in Oldsmar. Owned independently by Stella Thayer, Tampa Bay Downs has also voiced its opposition to the racetrack. Many horses that run in Tampa races ship in from the Ocala area.
Calder also says that an Ocala track would dilute an already shrinking population of horses available to run in the Sunshine State.
FLORIDA THOROUGHBRED BREEDERS' AND OWNERS' ASSOCIATION
A not-for-profit group headquartered in Ocala. As its name states, the FTBOA represents the interests of breeders and owners, many of whom live in the Marion County area. The group is regarded as a powerful lobbying entity in Tallahassee.
OCALA BREEDERS' SALES
State classified as a not-for-profit agricultural cooperative featuring about 80 individual shareholders, including some heavy hitters in the industry. OBS's empire includes thoroughbred auctions, feed and supply divisions, and an inter-track wagering complex that operates under a controversial state law. The executive board features some members that are also part of the FTBOA board. OBS, which also owns Ocala Jai Alai near Orange Lake, holds the quarter horse permit prominently featured in the amendment.
LEGISLATORS
Gov. Jeb Bush, powerful House Speaker Johnnie Byrd and instrumental representatives, including Ocala's Dennis Baxley, oppose any expansion of gambling. Conversion of a permit to allow thoroughbred racing in Ocala is something they might consider.
THE BILL
S2474 GENERAL BILL/CS/CS by Criminal Justice; Regulated Industries; Haridopolos (Compare H 1531, CS/S 1940, S 2636)
Legal Gambling; redefines term "full schedule of live racing or games"; authorizes Pari-mutuel Wagering Div. to consider application for permit within certain distance fro m existing pari-mutuel facility with consent of all active permitholders within county in which new permit is to be located; recognizes that pari-mutuel permitholders are highly regulated & taxed for public welfare & safety, etc. Amends Chs. 550, 849. EFFECTIVE DATE: Upon becoming law.
DIRECT LINK TO BILL
Senate 2474: Relating to Legal Gambling
(Direct Link to Proposed Bill)
TUESDAY - APRIL 19, 2004
Bill on Horse Track Delayed
St. Petersbugh Times
By Lucy Morgan
Tallahassee Bureau Chief
TALLAHASSEE - A new thoroughbred racetrack near Ocala is not in the cards this year.
A bill that would have allowed Magna Entertainment Corp. of Canada to build the track and expand simulcast gambling at other horse and dog tracks appears to be dead as state legislators move into the final two weeks of the session.
"It would take something miraculous to revive it," said Sen. Mike Haridopolos, R-Melbourne, the sponsor of the bill (SB 2474).
The bill was scheduled for a hearing Monday before the Senate Regulated Industries Committee but was deferred and is unlikely to be heard because the panel does not plan to meet again this year.
The measure, backed by the owners of Gulfstream Racetrack in South Florida, faced overwhelming opposition from the rest of the parimutuel industry.
Haridopolos said he thinks lawmakers need to revamp the industry because of declining revenues and hopes his effort will start a dialogue between competing interests.
Florida legalized horse and dog track racing in 1931 and collects about $34-million a year in taxes from the parimutuel industry, a figure that has been steadily declining for more than a decade because of competition from the Florida Lottery, cruises to nowhere and American Indian gambling. In 1993, state revenue from the tracks and jai alai frontons totaled $106.5-million.
"A lot of people are clinging to the past," said Gulfstream president Douglass Donn. His track is spending about $100-million on improvements.
Magna Entertainment, owners of Gulfstream, bought land two years ago near Ocala at Interstate 75 and Alternate U.S. 27 for a new racetrack but cannot build it without a change in the law.
Haridopolos said those who oppose changes risk the death of the industry.
The measure surfaced last week in the Senate Criminal Justice Committee when Sen. Nancy Argenziano, R-Dunnellon, attached it to a penny-ante poker bill without making copies available to the public.
Haridopolos said he decided to float the measure in another committee because he didn't think the Regulated Industries Committee, which traditionally hears racing bills, would give it a fair hearing.
Senate President Jim King referred the measure back to other committees for consideration, saying he didn't want to see any parimutuel bill that was not acceptable to lobbyists for all of the parimutuels.(© Copyright 2003 St. Petersburg Times. All rights reserved)